Reverse repurchase by the central bank: a transaction in which the central bank buys securities from a primary dealer, lends money and agrees to sell securities to the primary dealer on a specific date in the future;

The simple explanation is voluntary lending, and the transaction that obtains bond pledge is called reverse repurchase transaction. At this time, the investor is the lender who accepts the bond pledge and lends money.

The reverse repurchase operation has nothing to do with the RRR cut by the central bank. Reverse repurchase fund and RRR reduction fund are completely different in nature. Reverse repurchase funds are the central bank's own funds, which are only lent for a short period of time as monetary nature, and are recovered after 14 or 7 days. The funds lowered by the central bank were originally the funds of commercial banks, which were frozen by the central bank as legal reserves. RRR RRR reduction is equivalent to thawing and permanent release to commercial banks.

Extended data

Forward repurchase and reverse repurchase are both imported products. The earliest time was 19 18. At that time, in order to promote the development of bank acceptance bills, the Federal Reserve created repurchase transactions. On the morning of 20 19, 12, 18, the central bank announced that it would carry out 200 billion yuan reverse repurchase operation by way of interest rate bidding, including 50 billion yuan reverse repurchase for 7 days,15 billion yuan reverse repurchase 14 days.

Among them, the 14-day reverse repo rate was 2.65%, down 5 basis points from the previous operation. It is reported that the latest decline of 14-day reverse repo rate occurred on February 2, 20 16. Therefore, this is the first time that the 14-day reverse repo rate has fallen in four years.

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